The selling expenses and finance expenses decreased at 2010, Administrative expense increased RMB15.02 million or 22.8%, compared with the same period of 2009. The Net Exchange Loss approximately at RMB 13.8 million, which is the one of the key reason for the decrease of the net profit margin.
Impacted by world’s financial environment, HKD and USD have a large depreciation in the second half of 2010. The net proceeds from the IPO were approximately to RMB600 million and it should be examined and approved by the State Administration of Foreign Exchange before settlement in batches. This caused the large exchange loss, other than normal export trade. After payout of the final dividend of 2010, the estimated HKD storage could reduce to 50 million. Therefore, we can see that the exchange loss in 2011 will be decreased greatly.